Airlines hike fares up to $60 roundtrip, cite fuel

NEW YORK — Turns out that new airline checked-bag fee wasn't the end of it.

Airlines ratcheted up the pressure on fliers ahead of the holiday weekend, significantly raising ticket prices to offset the runaway cost of fuel. The three biggest carriers each boosted most domestic fares by up to $60 roundtrip, while budget airline AirTran Airways raised its leisure fares by $30 roundtrip.

UAL Corp.'s United Airlines led the round of increases late Thursday, lifting roundtrip ticket prices by $10 to $60, depending on how far passengers fly and the competition on the route. Travelers will pay the biggest increase on routes of 750 miles or more _ less than the distance from New York to Chicago _ that low-cost carriers such as Southwest Airlines Co. do not serve.

"It's part of all the work that we're doing to try to offset fuel costs," spokeswoman Robin Urbanski said.

AMR Corp.'s American Airlines, the biggest U.S. carrier, and No. 3 Delta Air Lines Inc. matched the increase Friday.

Separately, AirTran raised leisure ticket prices by $30 and business-class fares by $50 roundtrip. Such a large change is unusual for a budget carrier.

The increases came just days after American said it would begin charging customers $15 to check a single piece of luggage. Representatives from a number of other carriers, many of which are already charging $25 for a second checked bag, said they are considering following suit.

"Everything is under consideration with fuel the way that it is," AirTran Holdings Inc. spokeswoman Cynthia Tinsley-Douglas said.

Story continues below

advertisement

Airlines have come under intense pressure to boost revenue and cut costs as the cost of fuel has soared. As of Monday, spot prices for jet fuel in New York were up 43 percent from the start of the year, according to the Energy Information Administration.

Chicago-based United has been among the most aggressive carriers in pushing fares and fuel surcharges higher, and its increases are often rapidly matched by competitors. Airlines are prohibited from agreeing to simultaneously raise fares, but nothing prevents them from following a rival's lead.

"Airlines have no choice but to pass on the cost of fuel to consumers and when passengers do begin to push back in significant numbers the airlines have no choice but slash capacity," said Rick Seaney, chief executive of FareCompare.com, in an e-mail. He said this latest round would mark the 16th attempted airfare increase of the year. About 11 of those stuck to some degree.

In another sign of the pressure facing air carriers, Northwest Airlines Corp.'s cargo division said Friday it was raising its fuel surcharges on domestic and some international routes.

Midwest Airlines and Frontier Airlines, meanwhile, became the latest carriers to announce charges for second checked bags Friday. Neither introduced fees to check a single bag.

On Wall Street, airline stocks took a beating as oil prices resumed their climb, with benchmark light, sweet crude rising $1.38 to settle at $132.19 a barrel on the New York Mercantile Exchange.

Shares of UAL, Delta, Northwest and US Airways Group Inc. each hit their lowest points since the carriers emerged from bankruptcy protection, while AirTran shares were trading at their lowest point in more than five years. AMR shares hit a multiyear low Wednesday.

Comments

[forpeace]

*

If you like to travel within US, learn how to Walk.

If you like to travel overseas, learn how to Swim.

*

[PaulUK]

I hate to gloat here, but I have seen the European discount airline Ryan Air is having a sale on it's flights at the moment. I checked out their website and wound up booking a return flight from London to Germany for two pence (four US cents) Ryan Air and the other European Airlines when asked about the high price of oil stated that it was a problem but because the fleets are newer they consume less fuel (unlike the US based airlines who seem to be using far older planes, see American Airlines use of the MD80) Apparently the European airlines do want to operate in the States but are blocked because they are not American based, I bet the US airline industry lobbied hard for that one.

[vippy]

And in the future only the rich can fly. The GREAT US of A will only have a few airlines, fewer
flights, old machines, and the cost to Europe will be again too high for anyone in the middle class
like it was in the 1980s

[tao53nyc]

The reason all the airlines got in trouble is, after deregulation, they all engaged in a competitive "race to the bottom", to get the cheapest fares and the lowest common denominator of mass-market passengers. Now they are struggling to keep the planes full. And believe me, a full plane on a cross country trip is a miserable experience.

Re-regulation is not the answer. But the airlines are going to have to realize to maintain a healthy bottom line they're going to have to reverse some of their policies from the "race to the bottom" years. Increase ticket prices, perhaps significantly. But included in that is checked bags and a decent meal - the kind of service we enjoyed not long ago. Offer fewer seats with more leg room. They will still fill the planes, be profitable, and everyone will have a much more satisfying experience.

People in lower income brackets - and the primary beneficiaries of the race-to-the-bottom years, will probably be priced out of the market, at least until we can restore some sanity to the energy markets. But if it's a choice between keeping airfares artificially low to serve them, or keeping the airlines solvent and profitable and functioning, I know what I'd choose. It's just business.

Roundrtip coach airfare in 1960 was $300. That's $2400 today. I recently booked a flight for $400. That would be $50 in 1961. Seems to me there's some wiggle room here.

[swift goat pet for truth]

I used to like flying.

Then I didn't mind it.

Now it sucks.

Airline re-regulation just sounds better all the time.

[sparkandy]

I work for AA. There's a rumor that Gerard Arpey is trying to get the airline RE regulated. Hm...

[loki]

So what will they do when no one can afford to fly anymore? I personally have already not gone on 2 trips so far this spring/summer due to the prices. I know I am not alone. In polls and surveys, they always say one person usually represents 5000 people. So I know the airlines have lost 5000 x 2 =10,000 fairs in the last 3 months. Sure, it makes perfect sense to raise prices. Reminds me of those commercials with the real stupid cable company executives brainstorming on how to get their profits up..

[sparkandy]

Well, those of us who fly free will still be flying! Along with the obscenely rich who can afford the tickets. Imagine- planes filled with snooty rich people and low wage working class peons who work for the airline!

[KISSman]

If they want to jack up fares, fine. I won't like it, but I'll know what I'm up against up front. But it's just a sleezy move to charge people for checking a single bag.

Most people check one bag and it shouldn't be charged as if it is a luxury. We're all suffering due to fuel costs and nailing people like this horrible.

If American decides to do it, that's one thing. But I hate this group-think that goes on where the other airlines are all waiting to see how it goes over and if it goes over well enough that they'll all magically have the same idea in a month or two. And as consumers, we will have no other option out there to go to if we want to fly with an airline who doesn't charge for one bag.

Something just seems wrong when all of the airlines decide to charge for the same things at the same time. The consumer just becomes the helpless victim.

[fillou]

That's the dark side of capitalism. In the same activity; companies test the client, if the client can pay more and is willing to pay more, then the client will pay more to bring more profits to the company's shareholders. People should fly less when they can, instead of flying to go on vacation they should take the train